Sterling dipped to a two-year low against the dollar on Monday as traders continued to chase the greenback in anticipation of higher US interest rates.
In contrast, the Bank of England is expected to leave interest rates steady after a cut of 25 basis points in August. Analysts said a survey by research company Hometrack showing flat house prices in England and Wales also weighed on the pound.
"The dollar is clearly strong at the moment against European currencies in general," said Paul Mackel, FX strategist at ABN Amro.
"The Hometrack data showing no gain for November may be dampening some optimism right know."
Sterling had fallen to a two-year low of $1.7049 before triming losses to $1.7122 by 1508 GMT. Against the euro, sterling edged down to 68.56 pence to the euro, down around 0.3 percent on the day. Hometrack said house prices in England and Wales were flat on the month in November, leaving property prices down 2.5 percent on the year. On Tuesday Nationwide's UK house prices survey is due.